Businesses use commercial utility trailers to haul equipment and machinery, and to transport goods and supplies to various destinations. Commercial trailers used for business reasons must have insurance and valid registration with the state motor vehicle department. Insurance requirements vary by state, by usage, and, in some cases, by the weight or hauling capacity of the trailer.

Commercial Auto Policy

Utility trailers used for non-business purposes are covered by a personal auto policy. A utility trailer used for business purposes requires a commercial auto insurance policy. A commercial auto policy covers the vehicle towing the trailer. Coverages extend from the vehicle to the trailer. The primary coverage on a commercial insurance policy is liability insurance. Liability coverage provides financial protection to the owner of the trailer if he causes an accident or injures someone. The coverage pays the victim's medical bills and pain and suffering. The coverage also pays for the trailer owner's legal defense in a lawsuit.

Property Coverage

Property coverage pays to repair or replace the utility trailer if it sustains damage in an accident. The primary property coverages are comprehensive and collision. Owners can add these optional coverages to a commercial or personal auto policy for an additional fee. If the trailer is damaged or stolen, the insurance policy will fix the trailer or replace it with a trailer of like kind and quality. The policyholder must pay a deductible, which is a partial monetary amount of the loss. The amount of the deductible varies by policy.

Costs

Insurance rates for a utility trailer depend on several factors. An insurance agent will review the make and model, the annual mileage, and the primary use of the trailer. Rates also vary based on the trailer's cargo weight and the type of materials hauled. Many insurance carriers provide discounted rates for drivers above age 25 with a valid commercial driver's license. Trailers used in safe locations, such as areas with fewer accidents, may receive discounts or lower rates as well.

Considerations

In most states, owners must register and license a commercial utility trailer if it is used on state roads. Trailer registration typically requires proof of insurance. In some areas, trailers must pass a safety inspection to qualify for registration. Non-commercial utility trailers are usually exempt from registration and liability insurance requirements, depending on their usage and towing capacity.

About the Author

Sherrie Scott is a freelance writer in Las Vegas with articles appearing on various websites. She studied political science at Arizona State University and her education has inspired her to write with integrity and seek precision in all that she does.